Spanish solar energy developer Abengoa has won a contract to build a 110-megawatt solar tower project with storage in Chile, the first project of its type in Latin America.

The project will have 17.5 hours of storage through the use of molten salts. Since the Atacama Desert where the plant is located has the best solar resources in the world, the plant will be able to provide power virtually without interruption if required.

The Cerro Dominador plant follows the construction of a similar-sized plant in Nevada by U.S. company Solar Resource. Abengoa has begun construction of a similar but smaller plant in South Africa, the 50-megawatt Khi Solar One facility, which will have two hours of storage.

Abengoa is the largest developer of solar thermal energy plants in the world, with a range of large-scale projects across the globe, including the recently opened 260-megawatt Solana project in Arizona, which features parabolic troughs and six hours of storage.

It is the only company that builds parabolic trough and solar tower installations. Its first solar tower with storage facility was the PS20 installation at the Solucar Complex in Seville, Spain (pictured above). That facility has a capacity of 20 megawatts with two hours of storage.

Solar-thermal tower technology uses a series of mirrors (heliostats) that track the sun on two axes, concentrating the solar radiation on a receiver on the upper part of the tower where the heat is transferred to the molten salts.

The salts then transfer their heat in a heat exchanger to a water current to generate superheated and reheated steam, which feeds a turbine capable of generating power -- around 110 megawatts' worth in the case of the Cerro Dominador project.

The U.S. company SolarReserve this year will commence operations at the 110-megawatt Crescent Dunes solar tower with storage project in Nevada. That plant has been contracted to deliver electricity to the city of Las Vegas between the hours of noon and midnight.

Solar thermal with storage is coveted because of its ability to provide baseload or dispatchable power on demand. Unlike most coal plants, it can be switched off -- and store energy for future use -- as quickly as it can be switched on.

The $1 billion Cerro Dominador plant will have access to more than $500 million in loans from international agencies and as much as $20 million in state subsidies, the Chilean government has said.

Despite the high capital costs of the first-of-their-kind plants, developers say that their technology costs will fall below $100 per megawatt-hour by the end of the decade, a forecast endorsed by the Australian government’s Bureau of Resource and Energy Economics in its latest energy technology assessment report. This would make the plants cheaper than many gas-fired peaking plants.

Chile is looking to solar PV and solar thermal to exploit its solar resources and help meet its target of 20 percent renewable energy by 2025. Unlike many developed countries, Chile does not have a problem with overcapacity. In fact, the opposite is true, and power shortages make the cost of electricity very high in the country.

Abengoa said the storage system would make the technology highly manageable, enabling it to supply electricity in a stable way, 24 hours a day, responding to all periods of electricity demand.

The project will be located in the commune (i.e., municipal territory) of María Elena in the Antofagasta region of northern Chile. Construction is due to start in the second half of 2014.

Abengoa has 1,223 megawatts of installed solar capacity in commercial operation, 430 megawatts under construction, and 320 megawatts in pre-construction, including both solar-thermal and photovoltaic technology.